As much as I love the summer, once Labor Day weekend is over, things do get a lot more exciting than those relaxing outdoor activities. We've now got a full blown return to the markets from active investors and professionals, we've got the NFL season heating up, MLB postseason and of course for my fellow horse fans, Breeder's Cup in the Fall. Does it really get any better than that? Feel free to disagree with me on any of the above with exception to the cavalry return to the markets. It takes an awful lot of conviction to stage a rally like the one we all experienced yesterday. It's important to note, the last time we had a day like that in the markets was two days after we hit bottom in early June, which turned out to be the catalyst for a mid-term rally that took all summer long to erase losses the major indexes incurred from April and May. Is that a coincidence? I don't think so. We made it pretty clear last week that once we got past Labor Day, things would definitely start heating up. Although it took a few days, yesterday's move now gives us something to work with instead of a bunch of anemic sideways trading that not only makes it difficult to trade for profits, it's also like watching paint dry. Was yesterday an early indication the markets are ready to stage a new leg up? I've got some very objectives opinions for you here today to help you decide for yourself. First, when you have a look at the weekly or monthly charts of the NDX or the S&P, there's nothing suggesting this recent move isn't for real when it comes to the longer-term picture. Both of those indexes have broken up into new high territory for the year. Large cap tech continues to lead this market, as both of those indexes have posted better gains for the year than their counterparts. From a macro market perspective, that's actually a good thing because it's exactly what we've seen every time this market has found a base and moved higher over the last few years. Investors seem to be enthralled with stocks like Apple, Amazon and Google. For fairly good reason I suppose. Bottom line is there's a strong argument the new highs from the NDX and S&P are a prelude of things to come for the rest of the markets. With that being said, both the NASDAQ Composite and DOW Industrials are only up against their yearly highs and have yet to break new ground to the upside. If you're of the "show me" mentality, then there's an argument here the markets still have the potential to go range bound on us, which we've said wouldn't be a bad thing either. There's a lot more to this vast world of equities than just large cap tech, so it sure would be nice to see these two indexes break into new high territory for the year before we're absolutely certain this market is ready to roar again. As for the small cap world, the Russell 2000 is trying to catch up to all four indexes mentioned above. Quite honestly, that concerns me, but it appears the rest of the market doesn't seem to care. You can go back as far as you want and look at how many long-term rallies were initiated by small caps, and you'll see what I mean. Who knows, maybe the Russell is passé now and doesn't represent the true small cap landscape, but I've looked at a number of other small cap indexes and they all represent pretty much the same picture. Small caps for the most part have lagged their big brothers, however, we've killed it this year with small cap ideas. You just have to be selective. If you read our newsletter regularly, you know the right small cap ideas often provide way better returns than you can find anywhere else. Just look at our recent suggestions of REED, S and CALL, those are just a couple of extremely profitable ideas we've dished out this year. While we're on the subject of smaller stocks, I will point out yesterday's move in the major indexes is likely going to spark a plethora of penny stocks starting to move once again, which were pretty dead throughout the summer. Although penny plays are not for the faint of heart, we've had some huge winners this year for SCN Members, so there's no reason for us to think that won't continue. We've just go to find the right ideas. I'm going to get way off track here for a minute, but for good reason. Remember our edition on the Big Three back on August 24th? I bring this up because we suggested the recent rally in gold would continue, but that it was going to run into resistance when the GLD (Gold ETF) finally hit roughly $171 per share. Well, we didn't realize gold was going to rally that much that fast because as I type, shares of GLD are already trading north of $168 per share. We're only pointing this out for those of you who are opportunistic with your trading prowess. Gold may be setting up for profit taking and/or a decent short entry soon, as it approaches that $171 level. I've included a monthly chart of the GLD here showing you the $171 level represents a 5/8 retracement of its top to recent bottom, which would normally suggest a resumption of its downtrend, which was confirmed in March of this year. Since it's Friday, the last day of trading for the week, let's have a quick look at where this market may be going in the event the indexes manage to stage a fresh new leg up. Since the NDX loves to lead, we'll focus on it. I've including a weekly chart of the NDX here along with some Fibonacci expansion levels. You know we're huge fans of fib retracements, which often proves an excellent tool when trying to peg an entry, so it's no wonder we prefer fib expansion levels to help us determine where logical profit taking may exist at some point down the road. Assuming we continue higher from here, regardless of possible short-term pullbacks or jostling, it appears the NDX may be gunning for roughly 2912 before finally running into any sort of significant profit taking or resistance. This would represent a logical 5/8 expansion, which was calculated from its 2011 low to its high earlier in the year and finally off its June low of this summer. If you're an Elliot Wave believer, the recent move higher off the June low would represent the "C" move on the weekly charts. More importantly, that's just under a hundred points from where we are now, which is a pretty darn good tradable range if we can get there. Even if you're not a chartist, it's good to know these levels and numbers the markets may be gunning for, because regardless of whether or not you believe in charts, there's a lot of very smart people on the Street that use charts to tell their big money clientele when it may be time to buy or sell large positions, and those large positions have more of an impact on what the markets do than anything else. Enjoy your weekend and we'll see you on the other side.